THE PRESIDENT OF the US Chamber of Commerce in Ireland has said that Ireland needs to closely monitor business costs – in particular energy prices and office rents – in order to stay competitive and attract foreign investors.

Louise Phelan, who is also Vice President of Global Operations at Paypal, said Ireland’s competitiveness fell in recent years because we “allowed price and wage inflation to create a vicious cycle which drove up costs right across the economy”.

“We must not repeat those mistakes and we must hold onto the hard won gains of the past few years,” she said.

Exports

Phelan said that exports could be key to Ireland’s recovery and lessons could be drawn from the export-led growth of the late 1980s and early 1990s.

Ireland is a trading nation and the formula that helped this country emerge from the recession of the 1980s is basically the same one which will work for us again today and it is based on our people, our competitiveness and our open and transparent tax regime.

The chamber president commented that it is important that all costs, whether they’re imposed by the state or the private sector, are controlled or even reduced.

“We do not exist in isolation,” she explained. “Our international competitors are continuing to seek new ways to gain advantage over us – we cannot afford to stand still.”

Office accomodation

Even before the recovery began there was a debate around the need for a greater supply of high quality office accommodation for modern technology-driven businesses establishing here. If this shortage is compounded by significant price rises we will be sending the wrong message to potential investors so the decision by IDA Ireland to invest in developing suitable properties for regional investment is an appropriate and correct one.

She also said the government here must continue to reiterate its commitment to the 12.5 per cent corporate tax and maintain transparency in the tax regime.

There are currently 700 US companies located in Ireland and US multinationals made up 72 per cent of all IDA announcements last year.

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